EURGBP falls to a key support level and stalls on the test

Technical Analysis

Author: Greg Michalowski | eurgbp

The EURGBP has a key floor (old ceiling) at 0.8860 to 0.8878.


The EURGBP moved to the lowest level since November 23rd, and in the process moved into a key support area between 0.88603 and 0.88788. The low price today reached 0.88685 and has bounced. The current price is is at 0.8882.  There have been no fewer that 10 swing levels in that area and 6 separate lows that stalled in the area between Man and November. Today is the 7th low that has reached the level. 

The EURGBP has a key floor (old ceiling) at 0.8860 to 0.8878.
What now?

Buyers are leaning against the level.  However, I would suspect that on a break, the buyers would quickly turn to sellers  (and add some new shorts as well).  Nevertheless, buying is a low risk trade for traders hoping that the pressure over the last 6 trading days (all are lower) will run out of steam.   The price over moved from 0.9076 to the low today at 0.88685 over that period.  

Drilling to the hourly chart below, the pair is trading within a downward channel defined over the last 4 trading days. The topside trend line cuts across at 0.8898.  It would take a move back above that trend line to give the dip buyers some relief (has to stay above).  If the price can get above, the 0.89198 to 0.89325 would be minimum upside targets.   

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